The Securities and Exchange Commission has launched an investigation into the shoddy foreclosure practices of the nation’s mortgage lenders.

The SEC — along with other bank and mortgage regulators — is probing whether the mortgage industry is facing a widespread problem in documenting homeownership, according to the Financial Times.

The probe comes after the motgage industry has experienced a wave of average folks claiming that they have been improperly evicted from their homes. Attorneys general in all 50 states have also launched an investigation into whether lenders filed flawed paperwork to foreclose on homes.

So far, Bank of America has been the only firm to halt foreclosures nationwide, while other banks, including JPMorgan and Ally Financial, have announced more limited suspensions until they can review their practices.

On Wednesday, JPMorgan CEO Jamie Dimon stated that the bank has been reviewing some 115,000 affidavits to ensure that the bank has been properly documenting and authorizing foreclosures.

An investigation by bank regulators into flawed foreclosures, including “robosigning” and misplaced titles and deeds, comes as lawmakers clamor for a nationwide moratorium.

Meanwhile, concern is mounting that the big banks may be forced to shell out billions to repurchase badly documented loans and settle lawsuits. FBR Capital Markets Paul Miller projects that losses could hit $10 billion.

Sources in the industry expect that the SEC will level an industry-wide fine against mortgage lenders and force them to amend their foreclosure practices.

News of the regulatory probe follows two consecutive days of bank stocks getting hammered as investors fret the mortgage mess. Shares of Bank of America fell 4.9 percent to $11.98 in trading. JPMorgan shares were off 4 percent at $37.15, while Wells Fargo closed down 4.6 percent at $23.58.